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Project Management: Power Holding Company of Nigeria (PHCN), Its Accomplishments, Constraints, and Current Reform In Relation To Project Management in the Nigerian Power Sector Proposal

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Updated: Jun 3rd, 2019

Executive Summary

This research work is designed to investigate energy industry in Nigeria, particularly the Power Holding Company of Nigeria’s dealings in terms of project management. Essentially, the study will focus on a variety of issues pertaining the company’s accomplishments, constraints, and current reforms in the power industry.

The study will be titled “Project Management: Power Holding Company of Nigeria (PHCN), Its Accomplishments, Constraints and Current Reform In Relation To Project Management in The Nigerian Power Sector”. It is of the idea of finding out how project management has been conducted, challenges involved, and eventually successes achieved.

The objective of the study will be to highlight the importance of PHCN, its achievements since formation, investigate the growth or decline the power sector, investigate challenges faced, and study the current reforms being undertaken, as well as their benefits. Relevant data for this research topic will be sourced from a number of sources both primary and secondary sources.

A descriptive method of study will be employed for this research. Questionnaires will be issued to the staff in the organization, where 210 people will participate. A sample of 140 will be drawn from this population. Chi-square test will be used to test the validity of the hypothesis.

Background

The inability of most of the countries in Africa to provide access to power to most of its citizens has been considered as the curse on development (Okoro, & Chikuni 2007 p. 125). Energy is particularly crucial for any country that wants to achieve sustainable development.

Many developed cities across the world have seen those kinds of tremendous growths because of availability and access to energy (Barnett & Rolando, 2002, p. 177). The availability to a number of sectors of the country always determines the rate and level of development of that country. Energy is an indispensable element of transforming a subsidence economy to a service-oriented or production economy (Ekpo, & Iyoha 2007, p.127).

Energy has vast impact on education, manufacturing and production, service health, transport, housing and other demography. The need for safe and reliable source of energy has inspired countries to establish companies that would enable them to produce, and distribute energy. One of such companies is the Power Holding Company of Nigeria (Ekpo, & Iyoha 2007, p.127).

Lack of access to these energy sources can cause and increase in poverty. For instance, people would spend a lot of time seeking cheap and available sources like firewood and charcoal for cooking and lighting (Barnett & Rolando, 2002, p. 177).

These cause so much emission hence not friendly for the environment. Furthermore, cheap sources can cause health risks for instance use of paraffin and coal, as they require exceptionally large ventilation to burn.

The best energy alternative has been electricity as it is clean and remarkably efficient. Its development in Nigeria goes back to the late 19th century. During that time, in 1898, the first electricity generating company was built in Lagos.

According to Okoro and Chikuni (2007), “Distribution of power was a bit poor until 1950s since, the pattern of electricity lines was a few individual electricity power undertakings scattered across urban centres” (p.125). Few of those undertakings were public works departments, and municipal councils (Ekpo, & Iyoha 2007, p.127).

The power Holding company of Nigeria (PHCN) reserves the authority to produce and distribute electricity. The company has an installed capacity of 4,200 MW, a target it never reaches. At the best moments, the company produces 3,300 MW. Only 40% of the population has access to electricity, and it gets worse in rural areas where only 10% of people have access to electricity (Hall 2006, p. 7; Ariyo, & Jerome 2004, p.5).

Research Aims

The goal of the research will be to investigate the accomplishments, challenges and the current reforms that PHCN faced during its project management endeavours. This case study helps in understanding how the organization has been performing since its inception in terms of power production and distribution in the country.

Specific aims of the research included the following:

  1. To investigate the importance, achievements or the benefits of PHCN formation
  2. To examine the growth and decline of the power production and distribution
  3. To investigate the current reforms in the power sector and recommend appropriate strategies that could better in the current power production and distribution

Objectives

The objective of the study was to analyze the project management of the PHCN in Nigeria. The other objectives of the research will be;

  1. To study the various regimes the power sector has gone through and the accomplishments achieved by each of these regimes
  2. To determining the impact of the formation and functioning of PHCN on the power sector in Nigeria
  3. To investigate the strengths and challenges of PHCN in all sectors of PHCN

Questions Significance

This research will be immensely beneficial to every sector in Nigeria’s economy particularly the PHCN and its management need to establish a policy, which will ensure efficient and effective power production and distribution (Ibitoye, & Adenikinju 2007, p. 501). The study will help to highlight the challenges that plague PHCN.

The state owned organization (PHCN) will be able to use this research to assess its efficiency and means of working so that it can make amendments in its project management strategies where necessary. This viewpoint will help managers to develop ideas and solution to the said challenges hence coming up with the best ways to manage its projects.

The study hopes to arouse more study into the functional departments of the company by scholars hence broadening research resources. Therefore, the research will be of immense benefit to managers and researches as a point of reference for study and decision-making.

Literature Review

To be able to understand the position of Nigeria’s power sector in a practical context, it is pertinent to have a brief review of the PHCN developments to offer more insight in the industry since its inception (Ibitoye, & Adenikinju 2007, p. 501).

Brief History of PHCN

Decree number 24 of April 1972 formed the National Electric Power Authority (NEPA) formed following the merging of the Niger Dam Authority and the Electricity Corporation of Nigeria (ECN) (Hall 2006, p. 7). The 2005 unbinding of NEPA led to the formation of Power Holding Company of Nigeria.

NEPA had been established to maintain efficient and coordinated power supply to every part of the country. Regardless of the problems that NEPA faced after its formation, the organization was able to make significant developments in the country’s socio-economic development. This saw Nigeria advance unusually fast into the industrial society.

Importance of PHCN

The power production and distribution industry in Nigeria is under the management of the Power Holding Company of Nigeria. The power sector has seen a number of transformation thought that has not been enough to increase its supply of power to the people and still the supply fall below 40% (Okoro, & Chikuni 2007 p. 125). However, some few merits of PHCN have been identified as follows:

The power holding company of Nigeria has significantly improved the electricity billing system and clients can now settle their bill conveniently and via a much easier process (PHCN 2004, p.1). As a result, bank revenue-collection system was introduced to complement the collection of cash from the PHCN counters.

This program has enabled facilitation of prompt and regular settlement of the monthly power bills. This has been made possible by the fact that customers are no longer required to travel out of their residential areas to towns to pay electricity bills (PHCN 2004, p.1).

Customer service has improved due to institutionalization of the business. There is full and accurate settling of bills and the staff is more motivated to do their job (PHCN 2004, p.1).

Company Background in Various Regimes and Achievements

Supply of electricity commenced after formation of two small generating set to light up Lagos. By 1951, ECN was established by act of parliament to oversee the distribution. The Niger Dams Authority (NDA) was established after construction of a hydropower station of R. Niger in 1968, to distribute power (ESI 2004, p.18). The two bodies merged in 1972 to become NEPA.

NEPA was unbundled to institute power reforms to be renamed Power Holding Company of Nigeria in 2005 (Ekpo 2008, p.78). NEPA was state owned organization vertically integrated power management firm. The organization has the authority to produce, transmit, and distribute electricity.

As a public utility company, NEPA has been able to tap the country’s large water potentials to increases power production (Anoruo 2004, p.2). The NDA was able to construct vital dams in Nigeria including Kainji, Afam, Delta, Jebba, Egbin Shiroro and Sapele power stations (ESI 2004, p.18). The Sapele and Afam thermal stations also add to the energy source in Nigeria.

NEPA was able to fulfil its role of developing and maintaining an efficient and coordinated distribution of power through the federation (Anoruo 2004, p.2). NEPA enjoyed the quasi-commercialization status and building six main power stations increasing generation of power to 3,450 MW (Adoghe 2008, p.78).

However, even with these achievements, the population and power needs grew exceptionally fast in Nigeria that the company could not meet the target. It hence needed more power stations to boost production (Anoruo 2004, p.2).

Because of the unbundling process, NEPA became PHCN following the Power reform bill signed into law by President Olesugun Obasanjo (Jenide 2005, p.6). The policy decree provided the legal and regulatory guideline for the new strategies of commercial power generation and distribution. Private companies were also allowed to be involved in the production, transmission, and distribution of power.

PHCN made some advances even amidst myriads of problems (Ariyo, & Jerome 2004, p.6). The organization saw more additional thermal stations constructed. As already highlighted in previous paragraphs, thus body saw the development of better billing system increasing collection and making billing more efficient.

The PHCN is now separated into six power generation companies and eleven power distribution companies. All these firms will be privatized (Ikeme, & Ebohon 2005, p.1214). Logistics and union problems are some of the huddles delaying the process.

Reforms and Constraints

The inability of the PHCN to achieve the target power target has inspired reforms. The law initiating these reforms was signed in 2005 – the Nigerian Electric Power Sector reform act. The decree stipulates that there be a Nigerian Electricity Regulatory Commissions (NERC) (Jenide 2005, p.7).

The commission will function to regulate the energy system ensuring that there is efficient, fair, and organized competitive power market while at the same time shielding the public interest (Ikeme, & Ebohon 2005, p.1214).

NERC has been privatization of the utility company. This has been slow to take off since the public feels that; unguided privatization will cause skyrocketing prices making poor people more vulnerable (Chikwendu 2006, p.45). Something the organization should be seeking to increase. The famous power sector reform has been seen as an effort to propel the economy in some direction.

The problem is, however, whether timing is correct (Jenide 2005, p.7). Some critics doubt whether the process was given adequate thought and scrutiny.

The reforms are intended to improve the power sector to a level of attracting private sector participation, enlarge production capacity, improve service delivery making them more efficient, and encourage capital investors. However, even within the construction of new power stations, the reforms have not seen the expected results yet (Ezigbo 2004, p.104).

Hypothesis

Based on the research objective developed for this study, the following hypotheses will be used;

Ho – the various regimes PHCN has gone through have not attained significant benefits

Ha1 – the PHCN has had a positive impact on Nigeria’s power sector

Ha 2 – the PHCN has had benefits to Power sector despite challenges

Proposed Data Analysis Plan: Theoretical Framework

For quite a long time, Nigeria has not seen the development and advances it expected to see in its energy sector even with several reforms it established. Theoretical frameworks will be used to investigate a number of topics that may have caused or resulted into the benefits seen with each regime of power management.

The method is beneficial in that it will help in critical evaluation of the theoretical assumption; it will connect the investigator with existing knowledge then guide him/her to a new discovery based on the hypothesis. The main questions of why and how are answered allowing the researcher a straightforward description of a phenomenon observed like poor power generation amidst reforms.

Methodology

Research design: The study shall employ a descriptive survey method for investigation. It is deemed paramount to determine the process and method of study, since it will offer better background information to the readers enabling them to do better evaluation and understand how conclusions were deduced. Both primary and secondary sources of data will be used for the study.

Primary data will be collected via interviews of the PHCN employees while secondary data will include literature on PHCN from the library and the internet. Population of study will be employees of the company and some consumers of electricity. Data collection method will be a questionnaire.

Anticipated Problems and Timetable (Gantt chart)

The researcher anticipates few problems with regard to conducting the study. He anticipated lack of access to some important information from company employees as government utilities are cautious with giving out information. Financial and time constraints are likely to limit the study.

Research Timeline
Task Time
Defining The Topic and Consulting Supervisors Mar 4 – Mar 6 2012
Developing Research Questions collection of literature Mar 5 – Mar 15, 2012
Preparation of the Research Proposal Mar 18 – Mar 25, 2012
Presentation of The Research Proposal Mar 26, 2012
Literature review or Secondary Research Mar 28 – Apr 4, 2012
Finalization Of Research Methods And Plan Apr 4 – Apr 8, 2012
Presentation of the Proposal to University Research Department for correction and approval Apr 10, 2012
Submission of Proposal To Ethical issues regulatory agency Apr 11, 2012
Organizing Travelling, Obtaining Contacts, and Making the Budget For Research Apr 12 – Apr 13, 2012
Receiving Authorization From Ethical issues agency Apr 15, 2012
Carrying Out Pilot Research and Writing Up the results Apr 16 – Apr 13, 2012
Revising Research Methodology In Light Of Pilot study Jun 14, 2012
Carrying Out of the Research Jun 15 – Jun 29, 2012
Analyzing the Findings And Mapping Out the Presentation And Thesis Jun 30 – Jul 6, 2012
Writing the First Draft and consulting with supervisor Jun 7 – Jun 10, 2012
Writing the Final Draft Jun 11 – Jun 13, 2012
Consulting with Examiners and time for the Supervisor And Research Office to Make Consultation with Examiners Jun 14 – Jun 18, 2012
Preparing the Final Thesis For Submission and time for the Supervisor to evaluate Readiness For Submission Jun 19 – Jun 21, 2012
Submission of the Thesis Jun 24, 2012

Conclusion

Conclusion For a number of years, regardless of the consisted investment by the government into the power sector, the country has experienced power outages and the public is not convinced that this is normal there are complaints that the tariffs reduced compared to cost of power production.

To end all these problems, the state instituted power reforms and the main one has been the privatization of the state owned PHCN. This measure is intended to curb production, stop financial losses, and make efficient power distribution.

Reference List

Adoghe, A. U., 2008. Power Sector Reforms in Nigeria – Likely Effects on Power Reliability and Stability in Nigeria. [Online] Web.

Anoruo, C., 2004. Unbundling and Its Dynamics. NEPA News, March-May.

Ariyo, A., & Jerome, A., 2004. Utility Privatization and the Poor: Nigeria in Focus. In HBS Global Issues Papers NO.12. [Online] Available at

Barnett, S., & Rolando, O., 2002. Operational Aspects of Fiscal Policy in Oil-Producing Countries. Working Paper No. WP/02/177. Washington DC: International Monetary Fund.

Chikwendu, C., 2006. Engendering Nigerian Energy Policy. Paper Prepared For The UN Commission On Sustainable Development. ENERGIA – International Network on Gender and Sustainable Energy. Leusden.

Ekpo, I. E., & Iyoha, M.O., 2007. Nigeria’s Power Sector: Progress, Problems and Prospects. The International Journal on Hydropower and Dams, 14(6), pp. 127.

Ekpo, I., 2008. Challenges of Hydropower Development in Nigeria. Federal Ministry of Agriculture and Water Resources paper No. 262, pp.76-80.

ESI, 2004. Attracting Investment and Sustaining Development. Privatizing the Nigerian Electricity Sector. [Online] Web.

Ezigbo, O., 2004. Nigeria: Expanding NEPA’s Generation Capacity: Dream or Reality? This Day Newspaper, pp. 104.

Hall, D., 2006. Water and Electricity in Nigeria. [Online] Available at: <>.

Ibitoye, F. I., & Adenikinju, A., 2007. Future Demand for Electricity in Nigeria, Applied Energy Journal, 84(5), pp. 492-504.

Ikeme, J., & Ebohon, O. J., 2005. Nigeria’s Electric Power Sector Reform: What Should Form the Key Objectives? Energy Policy, 33(9), pp. 1213-1221.

Jenide, A., 2005. Understanding the Electric Power sector Reform Act. The Guardian, 6, pp. 6-9.

Okoro, O. L., & Chikuni, E., 2007. Power Sector Reforms in Nigeria: Opportunities and Challenges. Journal of Energy in Southern Africa, 18(3), pp. 123-132.

PHCN, 2004. Customer Service Charter: PHCN Nigeria. [Online] Web.

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IvyPanda. (2019, June 3). Project Management: Power Holding Company of Nigeria (PHCN), Its Accomplishments, Constraints, and Current Reform In Relation To Project Management in the Nigerian Power Sector. Retrieved from https://ivypanda.com/essays/project-management-power-holding-company-of-nigeria-phcn-its-accomplishments-constraints-and-current-reform-in-relation-to-project-management-in-the-nigerian-power-sector/

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"Project Management: Power Holding Company of Nigeria (PHCN), Its Accomplishments, Constraints, and Current Reform In Relation To Project Management in the Nigerian Power Sector." IvyPanda, 3 June 2019, ivypanda.com/essays/project-management-power-holding-company-of-nigeria-phcn-its-accomplishments-constraints-and-current-reform-in-relation-to-project-management-in-the-nigerian-power-sector/.

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IvyPanda. "Project Management: Power Holding Company of Nigeria (PHCN), Its Accomplishments, Constraints, and Current Reform In Relation To Project Management in the Nigerian Power Sector." June 3, 2019. https://ivypanda.com/essays/project-management-power-holding-company-of-nigeria-phcn-its-accomplishments-constraints-and-current-reform-in-relation-to-project-management-in-the-nigerian-power-sector/.

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IvyPanda. 2019. "Project Management: Power Holding Company of Nigeria (PHCN), Its Accomplishments, Constraints, and Current Reform In Relation To Project Management in the Nigerian Power Sector." June 3, 2019. https://ivypanda.com/essays/project-management-power-holding-company-of-nigeria-phcn-its-accomplishments-constraints-and-current-reform-in-relation-to-project-management-in-the-nigerian-power-sector/.

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IvyPanda. (2019) 'Project Management: Power Holding Company of Nigeria (PHCN), Its Accomplishments, Constraints, and Current Reform In Relation To Project Management in the Nigerian Power Sector'. 3 June.

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